Attached files
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| 8-K - 8-K - DIAMOND OFFSHORE DRILLING, INC. | d763123d8k.htm |
Exhibit 99.1
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Contact: Darren Daugherty Director, Investor Relations (281) 492-5370 | |
Diamond Offshore Announces Second Quarter 2014 Results
HOUSTON, July 24, 2014 — Diamond Offshore Drilling, Inc. (NYSE: DO) today reported net income of $90 million, or $0.65 per share, for the second quarter of 2014, compared with net income of $185 million, or $1.33 per share, in the same period a year earlier. Revenues in the second quarter of 2014 were $692 million, compared with revenues of $758 million in the prior-year quarter.
Net income for the quarter included $0.08 per share received from Niko Resources Ltd. related to a previously announced settlement agreement. Results also included a gain of $0.05 per share from the sale of the jack-up rig Ocean Spartan during the second quarter. Offsetting these items was a negative impact of $0.14 per share related to customer cancellation of the Ocean Vanguard contract.
“During the quarter, the first of our four newbuild drillships, the Ocean BlackHawk, commenced operations in the Gulf of Mexico,” said Marc Edwards, President and Chief Executive Officer. “During 2014, Diamond Offshore will have added five very capable assets to its fleet, three new drillships and two semi-submersibles, with a fourth drillship to be delivered in early 2015.”
“We retain a strong credit rating and a healthy balance sheet,” added Mr. Edwards. “Diamond Offshore remains well positioned to navigate through the current market cycle.”
CONFERENCE CALL
A conference call to discuss Diamond Offshore’s earnings results has been scheduled for 8:00 a.m. CDT today. A live webcast of the call will be available online on the Company’s website, www.diamondoffshore.com. Those interested in participating in the question and answer session should dial 800-247-9979 or 973-321-1100, for international callers. The conference ID number is 63586906. An online replay will also be available on www.diamondoffshore.com following the call.
ABOUT DIAMOND OFFSHORE
Diamond Offshore is a leader in offshore drilling, providing contract drilling services to the energy industry around the globe with a total fleet of 44 offshore drilling rigs, including five rigs under construction. Diamond Offshore’s fleet consists of 33 semisubmersibles, two of which are under construction, five dynamically positioned drillships, three of which are under construction, and six jack-ups. Additional information about the Company and access to the Company’s SEC filings are available at www.diamondoffshore.com. Diamond Offshore is owned 51% by Loews Corporation (NYSE: L).
FORWARD-LOOKING STATEMENTS
Statements contained in this press release that are not historical facts are “forward-looking statements” within the meaning of the federal securities laws. Such statements include, but are not limited to, statements concerning drilling rig deliveries and timing, and future performance, financial condition and market conditions. Forward-looking statements are inherently uncertain and subject to a variety of assumptions, risks and uncertainties that could cause actual results to differ materially from those anticipated or expected by management of the Company. A discussion of the important risk factors and other considerations that could materially impact these matters as well as the Company’s overall business and financial performance can be found in the Company’s reports filed with the Securities and Exchange Commission and readers of this press release are urged to review those reports carefully when considering these forward-looking statements. Copies of these reports are available through the Company’s website at www.diamondoffshore.com. These factors include, among others, general economic and business conditions, contract cancellations, customer bankruptcy, operating risks, casualty losses, industry fleet capacity, changes in foreign and domestic oil and gas exploration and production activity, competition, changes in foreign, political, social and economic conditions, regulatory initiatives and compliance with governmental regulations, customer preferences and various other matters, many of which are beyond the Company’s control. Given these risk factors, investors and analysts should not place undue reliance on forward-looking statements. Each forward-looking statement speaks only as of the date of this press release. The Company expressly disclaims any obligation or undertaking to release publicly any updates or revisions to any forward-looking statement to reflect any change in the Company’s expectations with regard thereto or any change in events, conditions or circumstances on which any forward-looking statement is based.
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DIAMOND OFFSHORE DRILLING, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
(In thousands, except per share data)
| Three Months Ended | Six Months Ended | |||||||||||||||
| June 30, | June 30, | |||||||||||||||
| 2014 | 2013 | 2014 | 2013 | |||||||||||||
| Revenues: |
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| Contract drilling |
$ | 649,554 | $ | 744,898 | $ | 1,334,862 | $ | 1,444,871 | ||||||||
| Revenues related to reimbursable expenses |
42,690 | 13,120 | 66,806 | 42,888 | ||||||||||||
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| Total revenues |
692,244 | 758,018 | 1,401,668 | 1,487,759 | ||||||||||||
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| Operating expenses: |
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| Contract drilling, excluding depreciation |
395,376 | 369,036 | 765,166 | 744,130 | ||||||||||||
| Reimbursable expenses |
42,290 | 12,805 | 65,956 | 42,094 | ||||||||||||
| Depreciation |
108,906 | 97,143 | 215,917 | 193,964 | ||||||||||||
| General and administrative |
20,478 | 16,435 | 43,305 | 33,250 | ||||||||||||
| Gain on disposition of assets |
(8,572 | ) | (260 | ) | (8,719 | ) | (2,264 | ) | ||||||||
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| Total operating expenses |
558,478 | 495,159 | 1,081,625 | 1,011,174 | ||||||||||||
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| Operating income |
133,766 | 262,859 | 320,043 | 476,585 | ||||||||||||
| Other income (expense): |
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| Interest income |
150 | 271 | 558 | 888 | ||||||||||||
| Interest expense |
(18,523 | ) | (7,951 | ) | (36,678 | ) | (16,020 | ) | ||||||||
| Foreign currency transaction gain (loss) |
(2,971 | ) | 448 | (4,149 | ) | 607 | ||||||||||
| Other, net |
181 | 674 | 508 | 420 | ||||||||||||
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| Income before income tax expense |
112,603 | 256,301 | 280,282 | 462,480 | ||||||||||||
| Income tax expense |
(22,890 | ) | (70,967 | ) | (44,759 | ) | (101,157 | ) | ||||||||
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| Net Income |
$ | 89,713 | $ | 185,334 | $ | 235,523 | $ | 361,323 | ||||||||
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| Income per share, Basic and Diluted |
$ | 0.65 | $ | 1.33 | $ | 1.71 | $ | 2.60 | ||||||||
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| Weighted average shares outstanding: |
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| Shares of common stock |
137,145 | 139,035 | 137,803 | 139,034 | ||||||||||||
| Dilutive potential shares of common stock |
4 | 37 | 5 | 43 | ||||||||||||
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| Total weighted average shares outstanding |
137,149 | 139,072 | 137,808 | 139,077 | ||||||||||||
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DIAMOND OFFSHORE DRILLING, INC. AND SUBSIDIARIES
RESULTS OF OPERATIONS
(Unaudited)
(In thousands)
| Three Months Ended | ||||||||||||
| Jun 30, | Mar 31, | Jun 30, | ||||||||||
| 2014 | 2014 | 2013 | ||||||||||
| REVENUES |
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| Floaters: |
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| Ultra-Deepwater |
$ | 182,656 | $ | 205,794 | $ | 231,101 | ||||||
| Deepwater |
120,539 | 146,559 | 184,105 | |||||||||
| Mid-water |
300,902 | 285,979 | 288,860 | |||||||||
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| Total Floaters |
604,097 | 638,332 | 704,066 | |||||||||
| Jack-ups |
45,457 | 46,976 | 40,832 | |||||||||
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| Total Contract Drilling Revenue |
$ | 649,554 | $ | 685,308 | $ | 744,898 | ||||||
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| Revenues Related to Reimbursable Expenses |
$ | 42,690 | $ | 24,116 | $ | 13,120 | ||||||
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| CONTRACT DRILLING EXPENSE |
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| Floaters: |
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| Ultra-Deepwater |
$ | 122,327 | $ | 123,530 | $ | 128,147 | ||||||
| Deepwater |
81,641 | 71,949 | 60,126 | |||||||||
| Mid-water |
148,931 | 134,046 | 139,252 | |||||||||
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| Total Floaters |
352,899 | 329,525 | 327,525 | |||||||||
| Jack-ups |
29,851 | 28,029 | 27,377 | |||||||||
| Other |
12,626 | 12,236 | 14,134 | |||||||||
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| Total Contract Drilling Expense |
$ | 395,376 | $ | 369,790 | $ | 369,036 | ||||||
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| Reimbursable Expenses |
$ | 42,290 | $ | 23,666 | $ | 12,805 | ||||||
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| OPERATING INCOME |
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| Floaters: |
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| Ultra-Deepwater |
$ | 60,329 | $ | 82,264 | $ | 102,954 | ||||||
| Deepwater |
38,898 | 74,610 | 123,979 | |||||||||
| Mid-water |
151,971 | 151,933 | 149,608 | |||||||||
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| Total Floaters |
251,198 | 308,807 | 376,541 | |||||||||
| Jack-ups |
15,606 | 18,947 | 13,455 | |||||||||
| Other |
(12,626 | ) | (12,236 | ) | (14,134 | ) | ||||||
| Reimbursable expenses, net |
400 | 450 | 315 | |||||||||
| Depreciation |
(108,906 | ) | (107,011 | ) | (97,143 | ) | ||||||
| General and administrative expense |
(20,478 | ) | (22,827 | ) | (16,435 | ) | ||||||
| Gain on disposition of assets |
8,572 | 147 | 260 | |||||||||
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| Total Operating Income |
$ | 133,766 | $ | 186,277 | $ | 262,859 | ||||||
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DIAMOND OFFSHORE DRILLING, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(Unaudited)
(In thousands)
| June 30, | December 31, | |||||||
| 2014 | 2013 | |||||||
| ASSETS |
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| Current assets: |
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| Cash and cash equivalents |
$ | 980,817 | $ | 347,011 | ||||
| Marketable securities |
350,156 | 1,750,053 | ||||||
| Accounts receivable, net of allowance for bad debts |
545,024 | 469,355 | ||||||
| Prepaid expenses and other current assets |
200,867 | 143,997 | ||||||
| Asset held for sale |
— | 7,694 | ||||||
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| 2,076,864 | 2,718,110 | |||||||
| Drilling and other property and equipment, net of accumulated depreciation |
6,055,990 | 5,467,227 | ||||||
| Other assets |
229,468 | 206,097 | ||||||
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| Total assets |
$ | 8,362,322 | $ | 8,391,434 | ||||
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| LIABILITIES AND STOCKHOLDERS’ EQUITY |
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| Current portion of long-term debt |
$ | 249,992 | $ | 249,954 | ||||
| Other current liabilities |
550,224 | 495,628 | ||||||
| Long-term debt |
2,244,336 | 2,244,189 | ||||||
| Deferred tax liability |
533,788 | 525,541 | ||||||
| Other liabilities |
237,034 | 238,864 | ||||||
| Stockholders’ equity |
4,546,948 | 4,637,258 | ||||||
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| Total liabilities and stockholders’ equity |
$ | 8,362,322 | $ | 8,391,434 | ||||
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5
DIAMOND OFFSHORE DRILLING, INC. AND SUBSIDIARIES
AVERAGE DAYRATES AND UTILIZATION
(Dayrate in thousands)
| Second Quarter (A) | First Quarter | Second Quarter | ||||||||||||||||||||||
| 2014 | 2014 | 2013 | ||||||||||||||||||||||
| Dayrate | Utilization | Dayrate | Utilization | Dayrate | Utilization | |||||||||||||||||||
| Ultra-Deepwater Floaters |
$ | 403 | 51 | % | $ | 387 | 66 | % | $ | 342 | 92 | % | ||||||||||||
| Deepwater Floaters |
$ | 418 | 51 | % | $ | 418 | 64 | % | $ | 409 | 99 | % | ||||||||||||
| Mid-Water Floaters |
$ | 266 | 68 | % | $ | 276 | 64 | % | $ | 271 | 65 | % | ||||||||||||
| Jack-Ups |
$ | 97 | 74 | % | $ | 93 | 79 | % | $ | 88 | 74 | % | ||||||||||||
| A) | Dayrate and utilization calculations for Mid-Water Floaters exclude 22 revenue earning days for which we did not recognize revenue pursuant to GAAP. |
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